Cash for school grades? It works.

Paying for performance can introduce students to courses they would never otherwise take.

January 22, 2008

The use of "pay for performance" – linking a financial reward to measurable goals – works in business. But can it also motivate underachieving students? Though cash may at first seem a perverse incentive for education, one study of such a practice shows some promising results.

Texas pays $500 to students in low-income, largely minority school districts who pass an exam for an Advanced Placement course. Known as the Advanced Placement Incentive Program (APIP), the practice has been around for more than a decade and has spread to a few other states.

Texas schools with APIP showed a 30 percent increase in the number of graduates who scored better than 1100 and 24 on the SAT and ACT college admission tests, respectively, according to a recent study at Cornell University in Ithaca, N.Y. Such scores are indicative of later success in college. The study also found that the number of students admitted to colleges from APIP schools rose by about 8 percent.

Aren't programs like this simply bribing kids to study? Shouldn't teachers and parents be able to get the same results by instilling a love of learning and by demanding excellence?

In theory, yes. But advocates of APIP-style incentives point out that students raised in homes below the poverty line often have parents who dropped out of school and who may not value education. They need to see clear rewards in order to take school seriously.

But there are intangible rewards, too. Students who ordinarily might never consider taking a college-level course are exposed to challenging classes usually taught by the best teachers at the school. They may discover a whole new world of learning.

APIP "has created a culture where it's cooler to be in an AP class than to be in a regular class," Michael Watkins, associate principal at Dallas's W.T. White High School, told U.S. News & World Report. He says more of his students are being motivated to apply to colleges.

The program could also save Texas taxpayers money, concludes C. Kirabo Jackson, a professor of labor economics at Cornell and author of the study.

Texas spends some $80 million each year on remedial college courses to bring incoming high school students up to a level where they can cope with college course materials. APIP could cut the number of college freshmen needing this extra help.

While his study didn't make a conclusive tie between cash awards and higher test scores, Professor Jackson said it did appear to change the culture of the schools. Attending an AP class no longer was looked upon as terminally un-hip. And even if the earnings were spent quickly on sneakers or an iPod, the sense of achievement remained.

Experiments such as APIP need to be closely watched and expanded, although carefully to prevent any abuses.

But the cool kids in high school are usually the sports stars or the Jerry Seinfeld wannabes who cut up in class. Can APIP be a bad thing if more students at low-performing schools start wondering what's happening inside those Advanced Placement classrooms?